Information Technology And Inventory Management In Steel Manufacturing Firms In Nairobi

Abstract

The study sought to measure the influence of information technology on inventory management in Kenya’s Steel manufacturing sector. The specific objectives were to establish IT enabled inventory management systems used by steel manufacturing firms in Nairobi and to establish the effect of adopted IT systems on inventory management of steel manufacturing enterprises in Nairobi. The study used descriptive research design. The study population was all the 35 steel manufacturing companies in Nairobi. Primary data was gathered using a semi-structured questionnaire. Data collected was analyzed through descriptive statistics and regression analysis. The study findings indicate that 52.1% of the variation in inventory management can be explained by warehouse management, material management, distribution requirement and vendor management. From the ANOVA table the F value (5.434) at significance level (0.004) implies that the model is fit to predict inventory management. The results further revealed that material resource planning, distribution requirements planning and warehouse management system predicted inventory management positively. Vendor managed inventory system was the least adopted by firms in the steel sector. The warehouse management system and distribution requirement planning system were adopted to a greater extent. This could be explained by the fact that most steel firms sell their products through distribution points. The firms also keep relatively large stocks, apart from steel fabricators who mostly use J.I.T inventory system. The research was limited by strict non-disclosure policies which was a constraint in release of real time data on inventory carrying costs, an important indicator of inventory management. The study recommends that future researchers concentrate on measuring cost of carrying inventory